Trevor Manuel is proposing to punish politicians who go over their budgets, writes Marion Edmunds
The Department of Finance is to make politicians and accounting officers take the rap even go to jail for unauthorised expenditure in their departments.
Against a culture of poor budgeting and financial irresponsibility, the departments of finance and state expenditure are drafting a tough new Treasury Act which bodes ill for governments reckless spenders. The Treasury Act will replace a number of Exchequer Acts as required by the Constitution.
The government says it is taking its cue from an Australian law in which penalties for fruitless, illegitimate or unauthorised spending include two- to seven-year prison sentences. It is also studying financial management systems in Britain, the United States, New Zealand and Canada. The provisions would apply to Cabinet ministers, provincial MECs, municipal councillors and senior managers, including accounting officers.
Agents of the state, possibly the auditor general or public accounts committees, would be able to lay charges against individuals who fail to justify unauthorised spending. These provisions are expected to send shock waves through government, particularly given current spending patterns.
The auditor general reported more than R151-million of unauthorised state spending in the 1995/96 year, and warned that financial management needed to be tightened up as soon as possible. Recent public service audits painted a gloomy picture of financial mismanagement and bad budgeting in provincial governments.
It appears now that Minister of Finance Trevor Manuel is preparing to wield the big stick to smack guilty parties into line. Manuel told the National Council of Provinces last month that a budget becomes law once passed and cannot be violated by politicians and officials.
He noted that the proposed Act would put in place best-practice systems and reporting and information requirements, as well as effective sanctions against accounting officers in all three spheres.
The governments chief director of inter- governmental finance, Ismail Momoniat, said current laws already empower the government to demand that accounting officers pay back to the state money spent without proper authorisation. However, there is no real tradition of using that power, he said. There is quite a lot of commitment to coming down on provinces and national departments.
One must see the Act in the context of a broader approach, of putting in place a more effective financial management system. This would include better incentives for those who perform well, as well as modernising the present system of issuing cheques and payments.
Similar pressure is building up politically for a crackdown on municipal accounting officers and executive committee members. The Local Government Amendment Bill proposes that councillors and accounting officers can be penalised not only for illegitimate spending, but also for failing to collect money owed to local councils.
The Department of Provincial Affairs and Constitutional Development has established that in June 1997, municipal governments were R7,95-billion in debt.
The deputy director general of the Department of Local Government, Dr Crispian Olver, said approximately R3-billion to R4- billion was long-term debt, a large portion of which was irrecoverable.
A lot of it is recoverable, he said. The Gauteng government showed this when they had a crackdown. They retrieved R1,8- billion of the amount owing. This shows that getting tough is part of the equation.